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Oil Fundamental Forecast – May 5, 2016
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Brent crude oil futures traded steady slightly above $45 a barrel and WTI crude held its ground above $44 a barrel, supported by reduced production in
Brent crude oil futures traded steady slightly above $45 a barrel and WTI crude held its ground above $44 a barrel, supported by reduced production in Canada’s oil sands region and pressured by expectations U.S. crude inventories will rise further from a record high.
Crude oil is down more than 6 percent during the month of May after reaching a 2016 high on April 29. The selling pressure was in reaction to rising output from OPEC, signs of an economic slowdown in the U.S. and Asia, and a stronger U.S. Dollar.
Oil prices may receive support today from the wildfires in the Canadian oil province of Alberta, but investors seem ready to take profits as soon as this story goes away. The fire caused the evacuation of the entire city of Fort McMurray and is also causing a shutdown of oil production.
A report late Tuesday from the American Petroleum Institute (API) said U.S. crude inventories rose by 1.3 million barrels. Stocks in the previous week were at a record high. Still, this number was below the 1.7 million pre-market estimate. However, strong demand for gasoline and diesel underpinned the market and prevented another sell-off.
Later today, the government’s inventory report will be in focus for confirmation of the inventory move. The Energy Information Administration report, due at 1430 GMT, is expected to show that crude oil inventories rose by 1.695 million barrels.
Today’s price action will be determined by the EIA report, the direction of the U.S. Dollar and whether investors demand higher yielding assets.
FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.
WEEKLY
Release Schedule: Wednesday @ 1:00 p.m. EST (schedule)
Gasoline and Diesel Fuel Update
Release Schedule: Monday between 4:00 and 5:00 p.m. EST (schedule)
Weekly Petroleum Status Report
Release Schedule: The wpsrsummary.pdf, overview.pdf, and Tables 1-14 in CSV and XLS formats, are released to the Web site after 10:30 a.m. (Eastern Time) on Wednesday.
Today’s economic releases:
| Cur. | Event | Actual | Forecast | Previous |
| USD | API Weekly Crude Oil Stock | 1.265M | 0.500M | -1.070M |
| USD | API Weekly Cushing Crude Oil Stock | 0.382M | 1.900M | |
| NZD | Employment Change (QoQ) (Q1) | 1.2% | 0.7% | 0.9% |
| NZD | Unemployment Rate (Q1) | 5.7% | 5.5% | 5.3% |
| USD | FOMC Member Lockhart Speaks | |||
| JPY | Japan – Greenery Day | |||
| EUR | German Services PMI (Apr) | 54.5 | 54.6 | 54.6 |
| EUR | Markit Composite PMI (Apr) | 53.0 | 53.0 | 53.0 |
| EUR | Services PMI (Apr) | 53.1 | 53.2 | 53.2 |
| GBP | Construction PMI (Apr) | 52.0 | 54.0 | 54.2 |
| EUR | Retail Sales (MoM) (Mar) | -0.5% | -0.1% | 0.3% |
| EUR | German Buba President Weidmann Speaks | |||
| USD | ADP Nonfarm Employment Change (Apr) | 196K | 200K | |
| USD | Nonfarm Productivity (QoQ) (Q1) | -1.4% | -2.2% | |
| USD | Trade Balance (Mar) | -41.50B | -47.10B | |
| USD | Unit Labor Costs (QoQ) (Q1) | 3.3% | 3.3% | |
| CAD | Trade Balance (Mar) | -1.40B | -1.91B | |
| USD | Markit Composite PMI (Apr) | 51.7 | ||
| USD | Services PMI (Apr) | 52.1 | 52.1 | |
| USD | Factory Orders (MoM) (Mar) | 0.6% | -1.7% | |
| USD | ISM Non-Manufacturing Employment (Apr) | 50.3 | ||
| USD | ISM Non-Manufacturing PMI (Apr) | 54.7 | 54.5 | |
| USD | Crude Oil Inventories | 1.695M | 1.999M | |
| USD | Cushing Crude Oil Inventories | 1.746M | ||
| USD | FOMC Member Kashkari Speaks | |||
| AUD | HIA New Home Sales (MoM) (Mar) | -5.3% | ||
| AUD | Retail Sales (MoM) (Mar) | 0.3% | 0.0% | |
| AUD | Trade Balance (Mar) | -2.900B | -3.410B | |
| CNY | Caixin Services PMI (Apr) | 52.6 | 52.2 |
Upcoming Economic Events that you should be monitoring:
Thursday, May 5, 2016
| Cur. | Event | Actual | Forecast | Previous |
| JPY | Japan – Children’s Day | |||
| GBP | Halifax House Price Index (MoM) | 0.1% | 2.6% | |
| GBP | Halifax House Price Index (YoY) | 9.6% | 10.1% | |
| EUR | ECB Economic Bulletin | |||
| GBP | Services PMI (Apr) | 53.5 | 53.7 | |
| USD | Initial Jobless Claims | 260K | 257K | |
| CAD | Building Permits (MoM) (Mar) | -5.0% | 15.5% | |
| USD | FOMC Member Bullard Speaks | |||
| USD | FOMC Member Bullard Speaks | |||
| USD | FOMC Member Kaplan Speaks | |||
| USD | FOMC Member Lockhart Speaks | |||
| USD | FOMC Member Williams Speaks | |||
| AUD | RBA Monetary Policy Statement |
Government Bond Auctions
Date Time Country Auction
May 04 11:05 Norway Holds bond auction
May 04 11:30 Germany Eur 4bn Apr 2021 Bobl
May 04 11:30 UK Gbp 2.75bn 1.5% 2021 Gilt
May 04 11:50 France Holds bond auction
May 04 17:20 Sweden Details of bond auction on May 11
May 05 10:30 Spain Holds bond auction
May 05 11:00 Austria Holds bond auction
May 05 11:30 UK Gbp 2.5bn 1.5% 2026 Gilt
May 09 17:20 Italy Announces details of bond auction
May 09 N/A Ireland Details of bond auction on May 12
May 10 11:30 Germany Holds I/L bond auction
May 11 11:03 Sweden Holds bond auction
May 11 11:30 Germany Eur 5bn Jun 2018 Schatz
May 12 11:10 Italy Holds bond auction
May 12 17:20 Sweden Details of I/L auction on May 19
May 12 N/A Ireland Holds bond auction
About the Author
James Hyerczykauthor
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.
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